EMN
Eastman Chemical Company
$67.23
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 25.9% below fair value
You pay
$67.23
Bear
$72.57
Fair
$90.71
Bull
$108.86
Bear
$72.57
+7.9%
$6.35 × 12x P/E
Fair
$90.71
+34.9%
$6.35 × 15x P/E
Bull
$108.86
+61.9%
$6.35 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
10.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $80.13 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $90.71 per share.
Warnings
The company's reported profits differ from official accounting profits by 55%. Check what costs are being left out of the adjusted number.
The company pays out 82% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $61.69 (below our primary estimate by 35%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples